German Q2 GDP growth expected at 0.5% qoq

German GDP is expected to have risen by 0.5% qoq in Q2, up from the weaker-than-expected 0.3% in Q1, on the back of robust domestic demand. While both stocks and net exports contributed negatively in Q1, the underlying growth in domestic demand was actually very impressive. With reduced headwinds from net exports and stocks, real GDP is not expected to disappoint this time. 

Private consumption in particular should have seen another strong quarter, while investment may have been more muted in response to increased uncertainty. So despite stronger growth in Q2 than in Q1, the underlying momentum may still be weakening and the coming months will be crucial in terms of assessing the longer-term impact of weaker trade and investment. Private consumption should, however, remain strong, in line with exceptionally strong real disposable income growth, both this year and next.